Over 130,000 budget homes under construction nationwide

The Ministry of Construction said 171 social housing projects under construction nationwide will supply over 130,000 units for the market in the coming years.

Of the total number, 108 projects worth VND31.76 trillion (US$1.41 billion) and having 61,290 units are for low-income people and 69,300 others worth about VND18.8 trillion (US$836.22 million) at 63 projects are being built for workers.

According to data of the ministry, 135 budget apartment projects have been completed, including 51 projects with 25,850 units and worth some VND9.56 billion (US$425.23 million) for low-income homebuyers and 84 projects with 28,550 units worth about VND6.73 trillion (US$299.35 million) for workers.

The number of units at low-cost apartment projects now underway is more than twice that of the finished projects. In addition, 85 completed projects in the housing development program for students have provided lodging for about 330,000 students.

However, the ministry said demand for social apartments is far higher than supply. A number of provinces have shown little or no interest in social housing development while the regulation that requires commercial housing projects to set aside 20% of land for building social homes has discouraged investors due to low profitability. And investors have found it hard to find medium- and long-term capital for social housing projects.

In another development, the People’s Council of Long An Province has passed a social housing development program for the 2016-2020 period, which aims to gradually meet housing demand of low-income citizens in the province and improve the quality of life.

The Mekong Delta province put the demand for social homes in the 2016-2017 period at over 12,600 units with total floor space of over 637,000 square meters. The province is focusing on upgrading old condo buildings and constructing new homes for civil servants and teachers.

Long An will also develop 1,713 dormitory rooms for workers and 1,432 resettlement condos with total floor space of more than 100,000 square meters.

From 2018 to 2020, the province will need nearly 32,000 budget apartments covering two million square meters in total.

Google CEO to meet with Vietnamese entrepreneurs, startups

Sundar Pichai, CEO of US Google Inc., will join a meeting with a group of selected Vietnamese entrepreneurs and the startup community in Hanoi on December 22 on the occasion of his first visit to Vietnam.

Though Pichai's trip is a private matter, the CEO agreed to join an hour-long talk with the Vietnamese business and startup communities, Dinh Hung, CEO and founder of JoomlArt Co., a co-organizer of the event, told news website VnExpress.

However the details of the meeting are yet to be revealed, he added.

According to the invitation of Google Vietnam publicized on December 19, there will be three Vietnamese individuals allowed to exchange directly with the Google CEO, and the event will be limited to 300 attendees including businesspeople, students and the media.

The talk will be held for the purpose of sharing experiences and inspiration, news website Zing.vn said, quoting information it received from Google Vietnam.

Anyone interested in the talk can send questions via social media to get the answer from Google, according to the company.

Sundar Pichai, born in 1972 in India, joined Google in 2004 to serve as the chief of Google Toolbar and Google Chrome, two key products with hundreds of millions of consumers even then.

He was appointed the new chief of Google Inc. in August this year.

In 2014, Pichai was put in charge of the engineering and research departments of many other Google products, services and technology platforms including Google Search, Google Maps, Google Play, advertising, and remote and wireless storage solutions for consumers, businesses and the education sector, known under the names Google Apps and Cloud Platform.

The two most important parts of the tech giant, Android and Chrome, are also under his administration.

Pichai is in charge of development, technology strategies and other standing operations of Google.

This is the first visit of a senior official of Google Inc. to Vietnam.

In early December, Apple co-founder Steve Wozniak came to Ho Chi Minh City to attend an event about content on social networks, mobile, statistical data and cloud computing.

Phase one of Nam Con Son 2 gas pipeline comes online

PetroVietnam Gas Joint Stock Corporation (PV Gas) has put into operation phase one of Nam Con Son 2 gas pipeline to supply more gas for the southern region.

The pipeline brings seven billion cubic meters of dry gas from Dai Hung field to the shore for processing a year.

The pipeline belongs to a master zoning plan for development of the country’s gas industry in the Southeastern region and was built to collect and process gas from fields in Nam Con Son and Cuu Long basins off Vietnam’s southern coast for power and fertilizer plants and other industrial facilities, said Duong Manh Son, general director of PV Gas.

Nam Con Son 2 gas pipeline has a designed capacity of 18.4 million cubic meters of gas and around 1,320 tons of condensate per day, equivalent to seven billion cubic meters of dry gas per year.

The pipeline comprises an undersea section of 325 kilometers stretching from Hai Thach-Moc Tinh field, connecting Thien Ung-Mang Cau and Bach Ho to the coast of Long Hai, and an onshore pipeline of nearly 40 kilometers from Long Hai to Phu My.

Phase one of Nam Con Son 2 gas pipeline costs US$402.6 million and loans account for 70% of the total.

Nam Con Son pipeline now supplies gas for eight thermal power plants which make up one-third of the country’s electricity output. They are Ba Ria, Phu My 1, Phu My 2.1, Phu My 2.2, Phu My 3, Phu My 4, Nhon Trach 1, and Nhon Trach 2.

1.6 million households in city to sign new power contracts

HCMC Power Corporation, or EVN HCMC, has started to send 1.6 million households notices on signing new electricity purchase contracts since the current deals between the two sides were clinched 10 years ago.

The new contracts for many households will be indefinitely valid, according to EVN HCMC.

A source from the firm told the Daily that the 2005 Electricity Law specifies that power purchase contracts have a validity of five years and can be automatically renewed for another five years upon expiration.

Therefore, the electricity purchase contracts signed in the 2005-2006 period fall due this year and next. Most of the 1.6 million households will have to sign new contracts next year.

The corporation said many general clauses have been removed from the new contract form to facilitate management and create convenience for customers, as they are specified in the Electricity Law. These clauses will be sent to clients for reference before they sign a new contract.

An indefinite contract will apply to customers whose personal data remains unchanged from the current contract as allowed by the Ministry of Industry and Trade.

The corporation has requested district-level power units to ensure that customers will be least affected.  The units will join hands with local authorities to handle customer concerns and their employees will help them sign new electricity contracts.

There are about 2.1 million electricity customers in HCMC, including 1.8 million households.

WB: Vietnam cities to need 374,000 new homes per year

Rapid urbanization will send the urban population rising to 50% of the nation’s total by 2040, so an additional 374,000 homes would be needed in cities a year to meet demand, the World Bank (WB) said in a report.

In the “Vietnam Affordable Housing - A Way Forward” report, the WB said the structural shift out of rural areas and toward a higher-productivity manufacturing and service-based economy will drive population growth and new demand for housing in cities.

As Vietnam continues to undergo rapid urbanization, adequate supply of affordable housing will be key to achieve national development targets and enable the country to maintain high growth. Cities will contribute a growing share of jobs and gross domestic product (GDP).

Urbanization has been used as a tool to accelerate economic growth and poverty reduction in many countries around the world. Therefore, affordable housing will be instrumental to helping Vietnam achieve its goals for increasing productivity and inclusive urban growth, the report said.

The report pointed out that despite economic growth, Vietnam still has a substantial deficit of quality housing. Around 4.8 million households in Vietnam are still living in poor conditions.

Meanwhile, much of new housing demand will be concentrated in a number of major cities and industrial zones. The Red River Delta region, Hanoi area and the southeastern region around HCMC will account for around two-thirds of the new housing demand.

It is important to develop a national affordable housing program that acts as a vehicle to implement the 2015 Housing Law and structure the Government’s interventions in the housing sector. This program should include initiatives to improve access to housing finance, stimulate supply of affordable rental housing and enable delivery of core housing to support the self-built housing sector.

The report underlined the need to prioritize structural reforms to improve governance of the housing sector and urban land management. Specific priorities are to strengthen an over-arching coordinating body that convenes all stakeholders and orchestrates implementation of selected housing initiatives, and to introduce reforms in the land taxation framework.

The report called for support for market development by investing in the building blocks of a functioning housing sector, including regulatory reforms to encourage greater participation of the private sector, improve real estate information systems, as well as monitoring and evaluation standards.

Firms bemoan new coding system

Enterprises have decried the way the customs applies the Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS), to decide value added tax and import tariff.

Speaking at a dialogue between firms and the HCMC Department of Customs on December 15, Tran Huu Tai of Dry Cell and Storage Battery JSC (PAC) said the company imports plate polarization to produce batteries and the supplier proved that this product can be used to make a type of synthetic fiberglass subject to an import tariff of 5%.

However, the Saigon Port customs office of Region 1 slapped a duty of 20% on the product, saying the HS code is different from what is declared by PAC.

The enterprise complained but the customs asked it to take a sample of the product to the analysis and classification center for import-export goods in HCMC for testing. But the center said it would check the product at the request of the customs but the latter refused to help PAC.

Tai noted that plate polarization is among items that the firm and the customs agency disagree over the HS code.

Meanwhile, Ajinomoto Vietnam said according to the existing regulations, Amix, an extract from beet sugar used for producing monosodium glutamate, has a value added tax rate of 5%. The customs requested the firm to make clear why a 5% tax should be applied.

However, the company last Monday received a letter in which the customs said the VAT rate for the product should be 10% as the firm declared the item as “material for monosodium glutamate production, an extract from sugar.”

Nguyen Quoc Toan, deputy head of the export-import tax division under the HCMC Department of Customs, said representatives of PAC and the Saigon Port customs office of Region 1 would have to work with the division to make clear if a 20% tax for plate polarization is reasonable or not. The case will be reported to the department.

Toan added that based on Circular 219/2013/TT-BTC, the VAT for Amix is 5%.

Pham Phu Cuong of Binh Minh Plastic JSC said he would have to come to the representative office of the Vietnam Chemicals Agency in HCMC to get a license whenever the firm imports a chemical to make plastic glue, a requirement which is inconvenient.

Dinh Ngoc Thang, deputy head of the HCMC Department of Customs, said from the beginning of next year, there will be areas for the Saigon Port customs office of Region 1 and the customs agency at Tan Son Nhat International Airport to check goods to help firms cut time for clearance.

C.bank to step up banking system restructuring

The State Bank of Vietnam (SBV) will speed up the restructuring of joint stock banks, continue dealing with cross ownership, and urge strong banks to get on the restructuring bandwagon.

A senior SBV official told the Daily that the central bank will assign staff to the boards of directors at the banks that are 51% or higher owned by the State, such as Saigon Thuong Tin Commercial Bank (Sacombank).

Another source told the Daily that Vietnam Export-Import Commercial Joint Stock Bank (Eximbank) would be holding a general meeting on December 15 and that the SBV would assign staff to Eximbank’s board.

The central bank also requested representatives of the Bank for Foreign Trade of Vietnam (Vietcombank) to join Eximbank’s board of directors.

With a 51% stake, the State is the biggest shareholder of Sacombank and can decide important issues including personnel. Small shareholders will have to comply with the State’s decisions, the senior official from the SBV said.

A source from Vietcombank affirmed the central bank had asked Vietcombank to pick employees to join the restructuring of Sacombank.

The central bank has made big headway in restructuring and recapitalizing ailing banks in line with a restructuring scheme for the banking system in 2011-2015. Cross ownership at banks has been put under control and liquidity of the banking system has been secured.

The central bank will continue restructuring the banking system but challenges remain. For instance, the consequences of cross ownership remain to be solved. In addition, corporate governance, management and internal control at some banks are weak.

Meanwhile, the restructuring of banks under State-owned enterprises has moved at a snail’s pace.

According to the SBV, total assets in the banking system had reached VND6,858 trillion (US$304.8 billion) by end-September and capital of banks had risen by 34%.

At a number of big banks like Vietcombank, risk provisions are big enough to handle bad debt. Other banks with high risk provisions are Military Commercial Joint Stock Bank (MB), the Bank for Investment and Development of Vietnam (BIDV), Vietnam Technological and Commercial Joint Stock Bank (Techcombank) and Asia Commercial Bank (ACB).

Since 2011, 10 banks have merged into others including the merger in 2011 of three commercial banks – De Nhat, Tin Nghia and Saigon – to create a single institution called SCB; the merger in 2012 of Hanoi Building Commercial Bank into Saigon-Hanoi Commercial Bank (SHB); the merger in 2013 of Dai A Commercial Bank into HCMC Development Bank (HDBank); the merger in 2013 of Phuong Tay Commercial Bank and PetroVietnam Finance Corporation (PVFC) into PVcombank; the merger in 2015 of Mekong Housing Bank (MHB) into BIDV; the merger in 2015 of Petrolimex Group Commercial Bank (PGBank) into Vietnam Bank for Industry and Trade (VietinBank); the merger in 2015 of Mekong Development Bank into Vietnam Maritime Bank; and the merger in 2015 of Southern Bank into Sacombank.

On top of that, the central bank acquired three ailing banks – Ocean Bank, Vietnam Construction Bank (VNCB) and Global Petroleum Bank (GPBank) - at zero dong.

Coffee export volume and value down

The Vietnam Coffee and Cocoa Association (Vicofa) said the 2014-2015 coffee crop has seen sharp declines in both export volume and revenue due to unfavorable global market developments.

Vicofa told a review conference on coffee production and export last week that Vietnam has shipped abroad 20 million 60-kilo bags of beans in the 2014-2015 crop, down a staggering 19.2% compared to the last crop. Meanwhile, the export price has dipped by US$300-400 per ton to US$1,800 per ton.

The price has slid below production cost, causing big losses for enterprises in the sector, according to Vicofa.

Moreover, drought driven by the El Nino phenomenon is forecast to exact a heavier toll on Asia this year than last year, and Vietnam’s coffee output in the next crop would be affected.

Vicofa said if the world coffee price continues going down, farmers would slash coffee plants to grow other crops like pepper and macadamia.

Nguyen Nam Hai, deputy chairman of Vicofa, said the association will continue to coordinate with the Ministry of Agriculture and Rural Development to implement Decision No. 3417/QD-TT dated August 1, 2014 on sustainable development for the coffee industry and request the State Bank of Vietnam to ask banks to provide loans for coffee purchase and replanting in the next crop.

Vicofa will help build links between traders and farmers to ensure stable production and consumption on both domestic and foreign markets. The association will also back farms to get bank loans for coffee production and replanting.

Foreign investment in property rises

Foreign companies registered a total of US$2.32 billion for 29 new and 10 operational property projects nationwide in January-November, US$1 billion higher than the same period last year, according to the Foreign Investment Agency.

A report by the agency under the Ministry of Planning and Investment says the foreign direct investment (FDI) in property made up 11.5% of the total FDI approvals in the nation in the first 11 months. This shows more foreign investors are confident in the property market which has been gradually recovering after a long period of lackluster activity.

Notably, the cost of the Empire City complex alone totals US$1.2 billion. Denver Power, a subsidiary of Gaw Capital Partners, has joined hands with Tien Phuoc Real Estate Joint Stock Company and Tran Thai Lands to develop the complex comprising an 86-storey observatory tower, a five-star hotel, a shopping mall, and office and apartment buildings in Thu Thiem Urban Area in HCMC’s District 2.

In October, Empire City Limited Liability Co. broke ground for Vietnam’s tallest building at a 15-hectare location on Mai Chi Tho Street and along the Saigon River. It is scheduled for completion in 2022.

Earlier, Gaw Capital Partners acquired four projects of Indochina Land in Vietnam, including Indochina Plaza Hanoi, Hyatt Regency Danang and two other projects underway in the central province of Quang Nam and HCMC.

More foreign property giants are entering the local market. For the first time, Dubai-based Emaar Properties PJSC has teamed up with Bitexco to develop the 430-hectare Binh Quoi-Thanh Da area in HCMC’s Binh Thanh District into a modern town. The city government has given approval to the two investors to implement the project in 50 years at a total cost of VND30.7 trillion (US$1.36 billion).

South Korea’s Lotte Group has placed a deposit of around VND2 trillion in land use fee for six lots in Thu Thiem Urban Area. The group is planning to build a smart complex worth US$2.1 billion.

According to property experts, more foreign property investors are coming to Vietnam thanks to the steady recovery of the local economy and the liberal new laws that allow foreigners and overseas Vietnamese to buy homes in the country.

Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), told a recent meeting with Japanese companies in HCMC that improvements of the business environment, property trading regulations and credit policies will help attract more foreign investment.

However, large investors remain cautious as most of them have chosen to join forces with local partners with cleared land and market expertise. In fact, the real estate market has also seen more merger & acquisition (M&A) and cooperation deals between foreign and domestic companies in recent times.

Creed Group, a Japanese investment fund with US$5 billion in total assets, has cooperated with NBB Investment Corp. and An Gia Investment to carry out some projects. The fund has pledged to buy a 20% stake at An Gia Investment, contribute capital on an equal footing and provide credit for An Gia to buy new projects.

Japanese investors Hankyu Realty and Nishi Nippon Railroad have teamed up with Nam Long Investment Corp. to develop Flora Anh Dao project in District 9.   

Support project for clean tech firms launched

The Ministry of Science and Technology in collaboration with foreign partners in Vietnam has kicked off a project for supporting clean tech enterprises as a measure to cope with climate change.

As part of the US$4.2 million project, the Vietnam Climate Innovation Center (VCIC) was inaugurated last week to back 48 clean tech firms in the first three years of operation and expand the supply of new and improved climate-smart products and services to more than 1,700 households.

The center will provide financing, mentorship and advisory services to domestic clean tech firms in the sectors of energy efficiency, information technology, renewable energy, sustainable agriculture and water management.

VCIC is operated by the Ministry of Science and Technology. It is an initiative of the World Bank Group’s Climate Technology program and is supported by the Australian Department of Foreign Affairs and Trade and the United Kingdom Department for International Development.

Vietnam is one of the five countries forecast to be most vulnerable to climate change. The Government considers clean tech as a key factor to help reduce greenhouse gas emissions by 8-10% in the 2010-2020 period and 1.5-2% by 2050.

Minister of Science and Technology Nguyen Quan said VCIC will back the Government’s effort to deal with climate change and promote green growth. It will help domestic firms accelerate development and application of new technologies to achieve sustainable growth in line with Vietnam’s green growth strategy for 2011-2020 with a vision until 2050.

The WB estimated Vietnam would need a total investment of US$19 billion for its clean tech market if the country wants to obtain the goal of 50% Vietnamese firms applying green tech to their production and business activities.

Victoria Kwakwa, WB country director for Vietnam, said VCIC will help turn climate change challenges into growth opportunities thanks to the support for small and medium enterprises to promote solutions to cope with climate change.

Competition authority wants Mazda 3 recalled over defect

The Vietnam Competition Authority under the Ministry of Industry and Trade has requested Vina Mazda to recall those Mazda 3 cars found to have a problem with the check engine light.

The authority made the request based on an explanation by Vina Mazda under Truong Hai Auto Corporation (Thaco), complaints by consumers and related documents.

The authority said the check engine light defect on Mazda 3 cars might affect safety and put users’ health, lives and assets at risk.

At a meeting with the competition authority last Thursday, Thaco was asked to observe regulations on recalling defective products in accordance with the rule on consumer protection and quickly handle consumer complaints.

Earlier, Thaco said the check engine light being on resulted from clogged injectors. It collected data of Mazda 3 cars and sent it to Mazda’s research facility in Japan for analysis to determine the cause.

Vina Mazda said it will provide customers with official information about the cause and solutions from Mazda Japan once the company gets details from the Japanese company.

Mazda Japan can publicize the cause of the problem in March next year, a source from Vietnam Register told the Daily on December 14 after a meeting between the agency and Vina Mazda, the assembler and distributor of Mazda cars in Vietnam.

The meeting took place after the agency in charge of safety and quality management of vehicles in Vietnam required Thaco to report on the defect as claimed by owners of Mazda 3 cars.

Vietnam Register had not decided whether to ask for a recall of Mazda 3 cars with the check engine light defect because the cause has not been identified. But Thaco has been told to find ways to address customer concerns.  

Vina Mazda said the check engine light problem does not affect the engine and operation of the car.

According to Thaco, while waiting for an official conclusion on this technical defect, consumers encountering such a problem can have the injector cleaned with the Deposit Cleaner solution free of charge and this could fix problems caused by the quality of fuels.

Thaco said the check engine light problem of Mazda 3 cars no longer happens after the injector is cleaned with the Deposit Cleaner.

The competition authority last week met nearly 20 people who represent owners of Mazda cars and have requested Thaco to explain why the check engine light is still on though a special solution has been used to clean the injector.

Though the problem has surfaced for more than four months, 662 Mazda 3 cars were sold last month, up over 100 units against the previous month.

According to Thaco, around 170 out of over 4,000 Mazda 3 cars in operation nationwide had had the check engine light problem as of last month.

Ministry pledges breakthrough proposals for institutional reforms

The Ministry of Planning and Investment will study and make breakthrough proposals for institutional reforms in order to back the development of enterprises in different sectors in the coming years.

Minister of Planning and Investment Bui Quang Vinh told the 70th anniversary ceremony of the planning and investment sector in Hanoi last week that besides proposals for institutional reforms, the ministry will suggest drastic changes in terms of mindset and development viewpoint.

Vinh said the ministry will request improvements of the roles of the State and State-owned enterprises (SOEs) and relations between the State and the market, and clarify the much-discussed concept of socialist-oriented market economy.

“The objective is to unlock growth potential of enterprises in different sectors, make the most of resources in the country and enhance the country’s competitiveness,” Vinh said.

Vinh told reporters after the anniversary ceremony that the ministry is preparing legal documents for selling SOEs with an aim to narrow the fields dominated by the State corporate sector and create favorable conditions for private firms to operate in the sectors where they perform well.

“This aim is the same as what is specified in the Law on Enterprise,” Vinh said. “In the past we though airports and seaports should be off-limits to the private sector but things have changed.”

Vinh said only 5% of SOEs’ total value has been sold and State ownership of up to 95% remains too high.

The ministry will soon publicize the Vietnam 2035 Report prepared by Vietnamese and foreign leading experts and the report contains recommendations for Vietnam’s development steps in the long term.

At the ceremony, Vice State President Nguyen Thi Doan highlighted major contributions by the planning-investment sector in times of hardship.

When there were doubts about the role of the planning-investment ministry in developing the market economy model, it made adjustments, focusing on studying and building strategies, long-term development plans, institutions, mechanisms and policies to support socioeconomic development and create a favorable business environment, Doan said.

Commenting on the role of the ministry, former Minister of Planning and Investment Vo Hong Phuc said the ministry is needed for the socialist-oriented market economy, especially in drawing up economic mechanisms and structures.

Lam Dong to open flower trading center

The Central Highlands province of Lam Dong is working with HCMC over a plan to establish what will be Vietnam’s first flower trading center in Dalat City, the province’s vice chairman Phan Van Da said.

Da said at a press conference in HCMC on December 14 that the center is expected to up and running in the next three years, thus supporting flower growers and traders to sustain business. The Japan International Cooperation Agency (JICA) will help the establishment of the facility as it is now supporting the province to develop high-tech agriculture including flower farming.

At present, the Japan External Trade Organization is helping the province to call for Japanese businesses to invest in flower farms. The province will organize trips for local flower growers and firms to promote their products in Japan and Malaysia.

The province plans to set up a large-scale cold storage facility in Duc Trong District for local farmers to reserve vegetables, fruits and flowers for off-season sales to increase incomes.

Lam Dong has made greater effort to promote flower farming in recent years and got backing from the Government. Recently, the Government has approved tariff exemptions for materials imported by enterprises and farmers to build facilities for high-tech flower farming.

Dalat supplies around 3.2 billion branches of flowers to domestic and export markets a year, rising by two billion branches compared to 10 years ago, Da said at the press conference held to introduce the upcoming Dalat Flower Festival.

The festival is set to take place from December 29 to January 2 in Dalat City with multiple events. Around 80% of these events will be financed by enterprises, organizations and citizens.

Vo Ngoc Hiep, chairman of Dalat City, said the festival might attract 500,000 visitors and promote tourism and agriculture, especially high-tech agricultural products including flowers in Dalat. The festival lured 400,000-450,000 visitors in previous years.

This year’s five-day festival will feature flower streets, fireworks, flower parades, vegetable and flower fairs, tours to flower gardens, workshops on flowers, a display of Dalat’s specialties including tea, coffee and wine, and awards for outstanding flower growers.

The festival will honor 125 outstanding flower farming households and firms. In addition to annual revenue of VND1 billion per hectare each, they will have to meet other requirements such as having at least five years of growing flowers, applying new techniques and planting new flower varieties.

Vinacomin eyes 35 million tonnes of coal to be sold in 2015

The Vietnam National Coal-Mineral Industries Group (Vinacomin) is striving to exploit 2.5 million tonnes of raw coal and sell 3 million tonnes of coal in December in order to fulfil its yearly targets set for 2015.

It set to exploit 37.2 million tonnes of raw coal and sell 35 million tonnes of coal this year.

According to Vinacomin, as of November, the group produced 34.7 million tonnes of raw coal, equal to 93.1 percent of the yearly target and up 2% over the same period last year. It sold 32.4 million tonnes of coal, or 92.8% of the yearly target, up 3.5% year-on-year.

In the period, the group’s revenues are estimated at nearly VND98 trillion (US$4.3 billion), equivalent to 93.4% of the yearly target.

Vinacomin, the country's largest mining firm, was established on October 10, 1994.

Affordable housing key to Vietnam’s goals of increased productivity

As Vietnam continues to urbanize rapidly, adequate supply of affordable housing will be integral to achieving national development targets and enabling the country to maintain a high rate of growth, with cities contributing a growing share of jobs and GDP.

According to a new World Bank report - “Vietnam Affordable Housing - A Way Forward”, the structural shift out of rural areas and toward a higher-productivity manufacturing and service-based economy will drive population growth and new demand for housing in cities. The share of the urban population is expected to reach 50% by 2040, with an estimated 374,000 additional units needed in cities each year to cope with demand.

“Urbanization has been used as a tool to accelerate economic growth and poverty reduction in many countries around the world, and affordable housing will be instrumental to helping Vietnam achieve its goals for increasing productivity and inclusive urban growth,” the report states.

According to the report, despite economic growth, Vietnam still has a substantial deficit of quality housing. Almost 20% or approximately 4.8 million households in Vietnam are still living in poor conditions. Meanwhile, the majority of new demand for housing will be concentrated in only a few major cities and industrial zones. Together, the Red River Delta Region, surrounding Hanoi, and the South East Region around Ho Chi Minh City, will account for around two-thirds of the new housing demand.

Vietnam has experienced several phases of housing policy in the past. Following liberalization of the sector, growth in the real estate sector spurred by foreign direct investment and speculation led to significant home price increases and supply in the luxury market that eventually resulted in a real estate bubble from 2009-2012.

The recent VND 30 trillion stimulus package, launched in 2012, has helped to reorient developers and lenders toward the affordable middle income market where there are real home ownership needs.

A revised Housing Law, passed by government in 2015, provides a strong legal framework for reforms with a new focus on supporting self-built housing, an active role for private sector in housing provision and addressing the shortage of affordable rental housing, especially for workers in industrial zones and students.

Toward that end, this report, which includes a comprehensive sector assessment and roadmap for affordable housing in Vietnam recommends the following key messages:

-        Increase and reorient government spending in the housing sector. In particular, focusing on programs that support and target the lowest two income quintiles and high growth cities, where the need for housing is most urgent.

-        Develop a National Affordable Housing Program that acts as a vehicle to implement the 2015 Housing Law and structure the government’s interventions in the housing sector. This Program would include initiatives to improve access to housing finance, stimulate supply of affordable rental housing and enable delivery of core housing to support the self-built housing sector.  

-        Prioritize structural reforms to improve governance of the housing sector and urban land management. Specific priorities are to strengthen an over-arching coordinating body that convenes all stakeholders and orchestrates implementation of selected housing initiatives, and to introduce reforms in the land taxation framework.

-        Support market development by investing in the building blocks of a functioning housing sector, including regulatory reforms to incentivize greater private sector participation, improved real estate information systems, as well as monitoring and evaluation standards.

These key messages are further elaborated into a concrete set of policy and program options, organized into six priority areas of action, to help to inform and shape the government of Vietnam’s interventions in the housing sector moving forward.

Tourism revenue soars thanks to Son Doong Cave: officials

Tourism revenue of Quang Binh Province in north-central Vietnam has reached VND179 billion (US$7.95 million) in 2015 thanks to the attraction of Son Doong Cave, local authorities have said.

The number of visitors to Quang Binh has topped 2.86 million this year, of which foreign arrivals are 46,900, an increase of 8.9%, officials from the People’s Committee announced on December 9.

Turnover from hotels and restaurants surged 19% to more than VND1.930 trillion (US$85.77 billion).

The strongest growth was recorded in tourism, which increased up to 89.4% and hit VND179 billion.

Local authorities said such success was the result of the Son Doong Cave promotional campaign, especially after the American Broadcasting Company (ABC) aired a signature program featuring the grotto earlier this year.

In May, ABC broadcast live the show accentuating the astounding magnificence of Son Doong and En (Swallow) Caves on “Good Morning America,” a much-loved program watched by an average of six million subscribers every day.

The caves are secluded in the core area of the UNESCO-recognized Phong Nha-Ke Bang National Park, located in the north-central province of Quang Binh.

En Cave is around two kilometers from Son Doong.

The expedition to Son Doong Cave has become a choice of many tourists from around the world.

To reach Son Doong Cave, trekkers have to hike through two densely forested expanses which span from Truong Son Tay Road to En Cave, and from En Cave to Son Doong Cave.

The adventure tours are considered highly difficult, during which visitors will have to walk nearly 60km, not to mention other activities such as climbing, crossing the forest, and wading through the streams.

In 2014, there were 243 tourists visiting the cave. At the end of August this year, this number rose to 482, including 47 Vietnamese.

There are currently nearly 500 awaiting visitors who wish to explore Son Doong Cave, filling the 2016 tour schedule.

Other visitors will have to wait for their turn in 2017.

The “pearl” of Phong Nha-Ke Bang, Son Doong Cave, which has a large, fast-flowing underground river inside, was found by a local resident named Ho Khanh in 1991.

It became public after a group of British scientists from the British Cave Research Association, led by Howard and Deb Limbert, conducted a survey in Phong Nha-Ke Bang, a UNESCO World Heritage Site, in April 2009.

According to the Limberts, Son Doong Cave is five times larger than Phong Nha Cave, previously considered the biggest cave in Vietnam.

The biggest chamber of Son Doong is more than five kilometers long, 200 meters high and 150 meters wide.

With such large dimensions, Son Doong overtook Deer Cave in Malaysia to become the world's largest grotto.

Hundreds of thrill seekers, mostly foreigners, are currently in line for an adventure expedition, which costs between US$3,000 and US$6,000 each person, to the awe-inspiring cave.

Barriers freeze foreign buying frenzy

Despite the recent revision to the Law on Housing, which has created a more favourable legal system for foreigners to buy and own houses in Vietnam, there are still some barriers which should be removed to encourage foreign buyers.

According to Cosimo Jencks, chief representative of Hongkong Land, the government’s allowance of foreigners to purchase housing in Vietnam is a step in the right direction.

The revised law however should review the stipulation that only 30 per cent of an apartment building in a commune and 10 per cent of housing development can be owned by foreigners.

“This should certainly be scrapped for second home developments. The process of documentation should be made quick and easy, and the financing options available should be improved,” Jencks told VIR.

Oliver Massmann, partner and general director of Duane Morris Vietnam LLC law firm agrees, adding that the restriction on the number of houses foreigners are allowed to buy in an area or in a building could ruin their expectations.

“In this regard, I would like to note that foreigners in Vietnam like living together in one community. Thus, such a restriction should be revisited in the implementing decrees of the Housing Law to reflect the positive purposes of the law,” he added.

Massmann added that a lack of legal framework for foreigners to mortgage assets, borrow money, register ownership, along with rising prices and complicated transfer procedures are the main hurdles for foreigners wishing to buy houses in Vietnam.

Meanwhile, Kenneth M Atkinson, executive chairman of Grant Thornton Vietnam, said that the current regulations on the repatriation of profits and uncertainty about whether owning a property entitles foreigners to a visa and the right to live in the property were concerns.

Other concerns were the continued devaluation of the Vietnamese dong which will reduce the opportunity to make capital gains in foreign currency.

The relaxation of foreign housing ownership regulations combined with promotional sales programmes offered by developers is reaping results after three months of implementation.

According to CBRE Vietnam, since the new law took effect, anecdotal evidence shows that some selected high-end projects with good locations, adequate facilities and were developed by prestigious investors have sold up to 15 per cent of their properties to foreigners and overseas Vietnamese.

From July to October this year, Vingroup reportedly received deposits for 400 units from foreign buyers.

Singaporean developer CapitaLand confirmed that about 15 per cent of the total transactions at Vista Verde have been bought by foreigners.

Keppel Land, another investor from Singapore also reported that foreign enquiries for their high-end condominium project Estella Heights have increased by 30 per cent.

Dong Nai to open seven VietGAHP standard stores

The southern Dong Nai Province will open seven stores to sell pork and chicken, which meet the VietGAHP standard.

A men is slaughtering chickens. The southern Dong Nai Province will open seven stores to sell pork and chicken, which meet the VietGAHP standard. -VNA Photo Dinh Hue

VietGAHP standard, or the Vietnamese Good Animal Husbandry Practices standard, is a range of principles that aims to improve products' quality and safety, to enhance the health of consumers and producers, protect the environment and support product traceability.

These stores, partnered by the Dong Nai Livestock Association and the Dong Hiep Livestock Service Co-operative, will be opened in Bien Hoa City, Trang Bom District and Thong Nhat District.

The stores are expected to open before Tet 2016.

According to Nguyen Tri Cong, chairman of the Dong Nai Livestock Association, this was the first step in a programme to build a safe food chain of the association.

In the coming years, the association would build a wholesale market for the distribution of VietGAHP pork and chicken, he said.

Mobile World to push its food business

Mobile World (MWG), the owner of the thegioidicong.com and dienmayxanh.com electronics supermarkets, will further promote its food business next year.

According to a representative from MWG, the retail food and consumer goods markets have huge potential because of growing demand among consumers. The company now owns four food stores, focusing on fresh food and essential food. “The four stores are still in the trial stage, giving customers the chance to experience the quality they provide,” the representative said.

Last week MWG released nearly 7 million shares, worth VND527 billion ($23.1 million), to 886 employees of the company and subsidiaries.

The employees must also meet the special conditions of the company, with no share transfers permitted in the first year and only 50 per cent in the following year. By the end of 2017 all employees are free to transfer their shares.

After the issuance the total number of MWG shares increased to 146.8 million, for charter capital of VND1.4 trillion ($61.6 million).

As at October MWG had recorded revenues of VND19.8 trillion ($871.2 million) this year, up 61 per cent year-on-year. The company now has 560 electronic retail stores nationwide and opens two new outlets every three days on average.

South Dinh Vu IZ II breaks ground

A breaking ground ceremony was held on December 14 for the South Dinh Vu Industrial Zone II - Deep C II and the Gateway Commercial and Logistics Business Centre - CDC Hai Phong, in northern Hai Phong city.

The ceremony was attended by H.E. Jehanne Roccass, Ambassador of Belgium to Vietnam, and representatives from the Ministry of Planning and Investment, the Hai Phong People’s Committee, local authorities, and investment promotion agencies.

The Dinh Vu Industrial Zone has more than 55 multinational projects, attracting almost 30 per cent of the total foreign direct investment (FDI) in the city. Deep C II covers a total area of nearly 650 ha and infrastructure is to be quickly completed and land of more than 40 ha handed over to tenants in 2017.

The remaining two components of the Deep C cluster are the Gateway Industrial Zone (Deep C III) of nearly 500 ha on Cat Hai Island and the Tien Phong Industrial Zone (Deep C IV) in Dam Nha Mac, Quang Ninh province.

Together these industrial zones make up a cluster of over 2,000 ha, nearby Lach Huyen Deep Sea Port, Dinh Vu Port, and Cat Bi International Airport, and directly connected to the new Hanoi - Hai Phong Expressway and the Tan Vu - Lach Huyen Bridge.

The same utilities at the Dinh Vu Industrial Zone will be executed in the Deep C cluster, with underground power networks connected to the national grid, certified waste water treatment services, and reliable water supplies and drainage systems.

With the success of the Dinh Vu Industrial Zone the Belgian investor, Rent-A-Port, decided to expand in the city by developing the South Dinh Vu Industrial Zone II - Deep C II, creating the Deep C industrial cluster in the area.

Deep C II is proud that though still in its early development stages it has welcomed the CDC International Corporation, one of the leading companies in Qatar in coastal industrial and urban area development, as its first FDI tenant.

The Gateway Commercial and Logistics Business Center in Deep C II, with total investment of approximately $2.2 million, will develop office buildings and open storage space for lease. After receiving an investment license in June this year the project is now scheduled to begin commercial operations in January 2017.

As highlighted by a representative of the Hai Phong People’s Committee, the ceremony marks an important milestone and affirms the commitment of the Belgian investor to Hai Phong. City authorities have committed to providing the most favorable conditions possible for the development of the Deep C industrial cluster and its investors.

Mr. Marc Stordiau, Chairman of South Dinh Vu II/Deep C II, said that the corporation will continue to deliver the same quality and reliability in infrastructure development, utilities, and services provision as those enjoyed by existing tenants at the Dinh Vu Industrial Zone. Putting all these elements together, tenants at the Deep C industrial zones will be in one of the best locations in Vietnam, just a short distance away from infrastructure and utilities of international standard.

BIDV & Becamex together in Binh Duong

The Bank for Investment and Development of Vietnam (BIDV) and Becamex IDC Corp. signed a comprehensive cooperation agreement on December 11 with the target of contributing to socioeconomic development in southern Binh Duong province.

The provincial government appreciates the effectiveness of the cooperation between BIDV and Becamex to date, Deputy Chairman of the Provincial People’s Committee Tran Thanh Liem told the signing ceremony. Provincial leaders will create all favorable conditions possible for the cooperation to achieve great success.

This is the third time the two have renewed the agreement for a five-year period.

They will promote their advantages to exploit their potential and diversify their business activities. The agreement is also expected to improve their competitiveness and contribute to growth in Binh Duong in the 2015-2020 period.

BIDV will arrange capital or directly finance Becamex IDC and its subsidiaries to develop feasible projects, with a maximum credit of VND15 trillion ($666.6 million).

The credit will focus on projects in developing urban areas and infrastructure at Binh Duong New City, developing infrastructure at the Bau Bang Industrial Zone and the Becamex Binh Phuoc Industrial Zone, projects in the development of the education and healthcare sectors, and projects in developing industrial parks and commercial and service areas developed by VSIP (Vietnam Singapore Industrial Park) in Binh Duong, Quang Ngai, Nghe An, and Hai Phong.

The bank is also committed to providing Becamex IDC and its affiliates with a diverse range of banking and financial products and services, such as payment services and centralized capital management, deposits, guarantees, trade finance, foreign exchange trade, securities services, and bond issuance, among others.

According to Mr. Tran Bac Ha, Chairman of BIDV, the bank will continue to accompany Binh Duong in completing its targets in socioeconomic development in the 2015-2020 period. Based on its relationship with foreign partners, BIDV will coordinate with the provincial government in attracting foreign investors, focusing on those from Japan, Taiwan, South Korea and Singapore, Mr. Ha said.

BIDV was the first bank to be present in Binh Duong when the province was re-established in 1997 and have worked with Becamex IDC since then.

Great sales at Sun Group's Phu Quoc properties

Sun Group introduced two projects developed on Phu Quoc Island - Premier Village Phu Quoc Resort and Premier Residences Phu Quoc Emerald Bay - in Hanoi on December 13.

On the first day of sales at Premier Village Phu Quoc Resort, attended by nearly 500 potential customers, 50 villas were sold.

Premier Residences Phu Quoc Emerald Bay, meanwhile, also saw a high number of transactions, with 150 apartments sold, according to Sun Group.

Sun Group has committed to owners and investors of Premier Village Phu Quoc Resort a minimum profit of 9 per cent per year in the first ten years and the same profit for the first nine years to owners and investors at Premier Residences Phu Quoc Emerald Bay.

Located on Ong Doi Cape, in the south of Phu Quoc Island, Premier Village Phu Quoc Resort has a total of 118 villas and is unique in having sea views on two sides.

Its prime location will provide a special experience for owners and visitors, as they can watch both the sunrise and the sunset.

Located on Khem Beach, also in the south of Phu Quoc Island, Premier Residences Phu Quoc Emerald Bay comprises more than 200 resort apartments of five-star standard with sea views. Apartments range from 30-288 sq m and are smartly designed with skylight systems to ensure the full use of natural light.

Facilities at the project include a gym, a spa, a dedicated area for children, recreation space at the pool-bar, and private space in the business center and library. AccorHotels will provide initial consultancy on services and then operational management.

Sun Group is one of the largest real estate groups in Vietnam and the largest investor in central Da Nang city, with dozens of notable projects in hotels, resorts, amusement parks, and urban areas, such as the InterContinental Danang Sun Peninsula Resort, Harnn Heritage Spa, Ba Na Hills Mountain Resort, and Asia Park, among others.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR